Apple Changed Its Mind. So Who's On the Hook?
Component makers can be caught off-guard when big customers flip their guidance at short notice.
The multiple constituent parts of an Apple iPhone.
Source: Bloomberg/Getty
Apple Inc. is pulling back from plans to increase production of its new iPhones this year. Instead, it will produce about as many as the prior year, in line with its original forecast. Fair enough — a looming global recession and strong dollar probably mean consumers outside the US will feel the pinch if and when they set out to buy a new phone.
Apple had raised its sales projections in the weeks leading up to the iPhone 14’s release, before reverting to its earlier forecast. So in theory, the retreat didn’t massively move the needle for its own products. But the trickle-down effect is harder to manage. What happens to the supply chain and the hundreds of manufacturers depending on Apple for guidance? The latest news hit them hard, sending the shares of chipmakers and phone assemblers tumbling.